ASEANcham: EU Deforestation Regulation should be delayed

Edited on the 6th October 2024.

The European Commission on the 2nd of October said that it will propose to postpone the implementation of the EUDR by another year.  Alongside the announcement also came with the publishing of the long awaited guidance documents which can be found here. Moving forward, the decision now lies with the European Parliament and individual Member States. This proposal would likely give us a glimpse of what is to come in the left-right confrontation over the EU’s Green Deal. 

Following the entry into force of the  EU’s Deforestation Regulation (EUDR) in June 2023, the end of the 18-month “transition period”, provided to give time for companies to prepare and adjust to the regulation’s requirements, is now looming. 

The EUDR’s due diligence requirements will kick in from 30 December 2024, creating a whole new set of onerous requirements for any company with more than 250 employees exporting to the EU. 

Nevertheless, the EUDR was never popular among businesses to begin with, and now pressure has been mounting on Brussels to delay its implementation. Many EU and non-EU stakeholders, including German chancellor Olaf Schultz, have argued that the 18-month transition period is not long enough for companies to implement the traceability mechanisms that are required by the EUDR. Most farmers, for example, lack the technical expertise to record coordinates for the EUDR’s mandated tracking. Companies are also now being asked to spend money and resources to set up and maintain a due diligence system. There is uncertainty over how the EUDR can be enforced and this is compounded by repeated delays in the release of enforcement guidelines for the EUDR in the past year, increasing uncertainty and difficulty for companies to navigate the bureaucratic requirements. 

As the December deadline approaches, calls for the EU to delay the implementation of the EUDR are gaining traction, citing the complexity of implementing its traceability and due diligence requirements. The EU Commission has received several petitions to extend the December 30, 2024 compliance deadline, including from the US government, but has so far declined to delay enforcement. While the EU Commission has so far been adamant about sticking to its implementation timetable, the newly re-appointed President of the EU Commission, Ursula von der Lyen, is said to be working on a solution, with a delay in its implementation not off the table.  

ASEAN companies are not spared

The uncertainties surrounding the EUDR will affect Vietnam, Indonesia and Malaysia the most, as rubber, coffee and palm oil exports are among the key exports of these ASEAN member states. As a result, the EUDR has been a sticking point in the deepening of EU-ASEAN relations and the FTA negotiations. It was the cause of the breakdown of the FTA negotiations with Malaysia. Moreover, concerns were raised on its impact on the competitiveness of affected goods. According to Dinh Sy Minh Lang, a representative of the European-American Market Department of Vietnam’s Ministry of Industry and Trade, one of the main concerns of ASEAN exporters affected by the EUDR is the impact of the increased cost of compliance and traceability on affected SMEs [1].

ASEANcham-EU invites ASEAN (and ASEAN-related) businesses or organisations to write in to contact@aseancham.eu to express your concerns and suggestions for the EUDR, so that we can better understand the impact of the EUDR on ASEAN. 

[1] https://en.vietnamplus.vn/vietnamese-firms-urged-to-quickly-adapt-to-eu-deforestation-regulation-post295781.vnp